CONFIDENTIAL BMIDEC 2016/FIN533/654/663 ee) UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION COURSE PERSONAL FINANCIAL PLANNING / PERSONAL FINANCE COURSE CODE : FIN533/654/663 EXAMINATION DECEMBER 2016 TIME 3 HOURS IN “TIONS TO CANDIDATI 1 This question paper consists of two (2) parts : PART A(1 Question) PART B (5 Questions) 2 ‘Answer ALL questions from PART A and any three (3) questions from PART B in the ‘Answer Booklet, Start each answer on a new page. 3 Do not bring any material into the examination room unless permission is given by the invigilator. 4 Please check to make sure that this examination pack consists of i) the Question Paper ii) aone~ page Appendix (Marginal Tax Rate) i) an Answer Booklet — provided by the Faculty 5. ‘Answer ALL questions in English DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO This examination paper consists of 6 printed pages (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 2 BM/DEC 2016/FINS33/654/663 PARTA QUESTION 1 Hakimi has been working at Petronas Oil for the past 10 years. At the age of 40, he is blessed with 2 wives and 4 children. Hakimi earns RM20,000 monthly salary and he planned to have the third wife by next year. Hence, Hakimi needs to properly understand his current financial position. Hakimi pays 11 percent EPF contribution from his gross salary. The following is Hakimi's financial information: RM Cash on hand 5,600 Current account (CIMB) 30,550 | Automobile (market value) ee 60,000 Semi-D linked house (market value) 650,000 ‘Apartment (market value) 400,000 Furniture and household possessions a 86,600 | Asus laptop (current value) Z 3,000 Dell desktop (current value) _ 4,500 TNB bill overdue i 1,200 Telephone bill overdue 850 Mastercard outstanding balance 30,500 Investment in Pilgrim Fund Board (Tabung Haji) 32,000 Takaful Keluarga cash balance 25,000 Automobile loan balance _ 150,400 | Mortgage balance (Semi-D linked house) ___450,000 Mortgage balance (Apartment) _ 256,000 Children tuition fee (per children per month) 500 ‘Annual tax 14,800 Semi-D linked house monthly loan payment 3,500 | Apartment monthly loan payment _ 2,000 ‘Automobile installment payment 4,500 ‘Takaful Keluarga and medical insurance monthly premium 4,350 ASB balance as at 31 Dec 2015 2,800 Monthly meal expenses __ 4,000 Monthly utilities cost 2,320 Monthly transportation — fuel, toll and parking 2,600 Clothing purchase every quarter (value of RM15,200 as at 1 Jan 2015) 2,200 Cable TV Astro per month 120 Vacation and holiday per wife 7 2,000 Charity contribution - 200 ‘© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 3 BM/DEC 2016/FIN533/654/663 Based on the following financial information, construct: a) Balance sheet as at 31 December 2015 for Hakimi. (14 marks) b) Income statement for the year ended 31 December 2015 for Hakimi. (8 marks) ©) Based on your previous statements in (a) and (b), compute and comments the following ratios: i) Current ratio ii) Liquid assets to take-home pay ratio iil) Debt ratio iv) Debt service ratio (8 marks) 4) With regards to Hakimi's financial position, advise Hakimi whether he can afford to have the third wife next year. Provide justification for your answer. (4 marks) ) Suggest two (2) ways on how Hakimi can improve his future financial plant (2 marks) f) The common economic concepts in financial decision making is marginal analysis and the opportunity cost. Define the two concepts (4 marks) (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 4 BM/DEC 2016/FINS33/654/663 PART B QUESTION 4 Firdaus is a finance manager of Mentari Berhad and his wife, Dania is a private school teacher. The couple is blessed with six children; four of them aging ten to sixteen are ‘schooling while the two elder daughters are currently studying at local universities, The second child is handicapped and requires special attentions. Currently Firdaus enrolled for part-time MBA at Universiti Teknologi MARA. For tax purposes, the couple has come out the following details of income and expenses incurred for the year 2015. Firdaus (RM) | Dania (RM) ‘Annual salary _ 84,000 36,000 Rental income 9,000 Part-time tutoring __3,000 Performance bonus : Medical treatment for Firdaus's father Parents’ medical expenses Monthly scheduler tax deductions EPF contribution Medical insurance - Life insurance premiums Course fee for part-time MBA at UITM 8,000 : Monthly donation to National Kidney Foundation 250 - Astro 1,200 : Tennis racquet - 1,200 Laptop (purchased this year) - 4,700 Monthly broadband charges 90 : Monthly books, journals and magazines 100 : Electronic wheelchair for the 2™ child 6,500 | Private Retirement Scheme monthly contribution 250 - Firdaus and Dania decided to file their tax assessment separately, thus decided the relief of their children will be filed under Firdaus's assessment. The couple also agrees to file Dania’s laptop purchase under Firdaus. Any remaining tax relief for books and magazines will be filed under Dania, You are required to determine the income tax payable for Firdaus and Dania under separate accounts of 2015, (20 marks) (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 5 BM/DEC 2016/FIN533/654/663 QUESTION 2 a) Mr. Zabidi recently received his Mastercard bill for the period of September 15 — October 14, 2016. He wants to verify the monthly finance charges by his bank, BHBB Bank. The interest rate is charged at 18 percent per annum and the bank requires standard 5 percent for monthly minimum payment. The following is the credit card statement received for the month 15/09/2016 | Opening balance _ RM5,400 76/09/2016 | SOGO Dept. Stores Kuala Lumpur RM2, 100 16/09/2016 Manhattan Fish Market SOGO Kuala Lumpur RM_120 [20/09/2016 | IKEA Cheras - Children Bedroom Set RM3,000 22/09/2016 | Repayment RMB, 000 28/09/2016 Lazada — Image Class Printer RM1,550. 30/09/2016 Return Printer to Lazada due to broken product RM1,550. 02/10/2016 | Purchase retum airline ticket to Kota Kinabalu RM_850 (04/10/2016 | Shell Sinar Bakti Kota Kinabalu RM_ 60 [08/10/2016 | Kinabatangan Hotel, Kota Kinabalu RM_900 Compute the average daily balance, interest amount, outstanding balance, minimum Payment, and outstanding balance after minimum payment using average daily balance method (including current purchase). (15marks) b) Distinguish the characteristics of blue chips shares and income shares. (6 marks) QUESTION 3 a) Mr. Aiman involved in an accident while commuting from his house to 10! City Mall in Putrajaya. He was admitted at Putra Medical Centre. His hospital bill has accumulated to a few thousand ringgits due to medical complication during his treatment. Mr. Aiman received his hospital bill and made a comparison with his medical insurance coverage. The details are as below: tem Insurance Coverage Hospital Bill | Surgery RM12,000 RM14,000 Doctor RMB5,000 max RM4,000 Hospital Room RM780 max per day with total | RM250 per day for 35 max of RM5,400 per year days Medicines & CT-Scan | Reasonable amount paid full RM2,500 Mr. Aiman paid RM1,800 insurance premium per year. Calculate the total medical cost, the amount covered by the insurance policy and Mr. Aiman's share of the cost of his treatment (excluding the yearly premium). Discuss and comment whether it is a good decision to pay the premium of RM1,800 for the policy. (10 marks) b) Describe five (5) distinctions between insurance and Takaful. (10 marks) (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 6 BMIDEC 2016/FIN533/654/663 QUESTION 4 a) Razman has been working with Petro and Co, since his graduation in 1996 at the age of 22. He wishes to withdraw his EPF account this year at the age of 42 in order to purchase additional units of Public Mutual Fund. He has RM102,000 in his Account 1, and he wishes to make four (4) continuous withdrawals this year if possible. Determine number of withdrawal and the amount that Razman can withdraw for each withdrawal in that year. Table below provides partial Basic Saving Table from EPF. ‘Age Basic Savings (RM) 22 7,000 27 18,000 32 34,000 37 [54,000 42 81, 47 117,000 52 163,000 (10 marks) b) Will is an important tool of estate planning. Discuss five (5) possible reasons that cause a will to be updated by the testator. (10 marks) QUESTION 5 a) Hibah can be used to complement a will. Describe two (2) distinctions between hibah and will (4 marks) b) Discuss any three (3) factors to consider in property investment. (6 marks) ©) Mrs. Harlina bought a land and build a house costing of RM200,000 and RM220,000 respectively. She obtains 40 percent financing to purchase the land and managed to get 90 percent financing for the house construction. Besides buying a house, she also needs RM12,000 to pay for her tertiary education at MSU. If she has RM190,000 in her EPF Account 2, determine the amount that Mrs. Harlina can withdraw from this account for housing purposes (as her first priority) and determine if she can withdraw further for the education purposes. Compute the available balance of Mrs. Harlina's EPF Account 2 after each withdrawals. (10 marks) END OF QUESTION PAPER (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL APPENDIX 4 BMIDEC 2016/FIN533/654/663 Marginal Tax Rate Assessment Year 2015 Chargeable income | Calculations (RM) Rate (%) Tax (RM) 0-2,500 ‘On the First 2,500 0 0 2,501 — 5,000 Next 2,500 0 0 5,001 = 10,000 ‘On the First 5,000 | a Next 5,000___| 1 50 10,001 = 20,000 | "Onthe First 10,000 50 _ Next 10,000 1 _| _ 20,001 = 35,000 | On the First 20,000 Next 15,000 5 750 35,001 = 50,000 | On the First 35,000 ‘900 Next 15,000 10 4,500 50,001 70,000 | “On the First 50,000 2,400 Next 20,000 16 3,200 70,007 = 100,000 | On the First 70,000 5,600 c Next 30,000 21 6,300 100,001 = 150,000 | Gn the First 100,000 11,900 Next 50,000 24 42,000 150,001 - 250,000 | On the First 150,000 23,900 Next 100,000 24 24,000 250,001 = 400,000 | On the First 250,000 47,900 _ Next 150,000 24.5 36,750 Exceeding 400,000 | On the First 400,000 84,650 Next RM 25 (© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL